Public Payers News

CMS Unlawfully Paid $9M to Beneficiaries for Medicare Services

CMS has improperly paid more than $9 million for Medicare services among unlawfully present beneficiaries in 2013 and 2014.

By Vera Gruessner

The Centers for Medicare & Medicaid Services (CMS) has improperly paid more than $9 million for Medicare services among 481 unlawfully present beneficiaries during the years 2013 and 2014, according to a report from the Department of Health & Human Services (HHS) Office of the Inspector General.

Improper Medicare Payments

The laws under the federal government prohibit CMS from paying for Medicare services among patients who are not legal residents of the United States. While CMS had policies in place to keep from reimbursing medical care given to beneficiaries not lawfully present in the country, the agency did not follow through on its procedures to recoup payment from Medicare contractors.

When the Medicare Access and CHIP Reauthorization Act of 2015 was signed into law, CMS was required to create policies and protocols around claim verification to make sure payments are not made to individuals who are not legal residents of the United States.

The Office of the Inspector General found that when CMS data systems discovered a claim was made for a beneficiary that was unlawfully present in the nation, CMS had procedures to prevent reimbursement for these Medicare services and followed the policies.

However, when data systems showed only after a claim had been processed and paid that an individual was unlawfully present in the US, CMS did have policies to detect and recoup payment but did not stick to these procedures. In 2013 and 2014, CMS did not contact Medicare contractors to begin recoupment of the payment among those beneficiaries.

“In April 2013, CMS implemented policies and procedures in response to an audit report we had issued,” the report from the Office of the Inspector General stated. “In that review, we found that when CMS’s data systems had been updated by SSA’s [Social Security Administration] systems to indicate that at the time a claim was processed a beneficiary was unlawfully present, CMS’s policies and procedures (through a prepayment claims edit) were adequate to prevent payment for Medicare services.”

“However, when CMS’s data systems did not indicate until after a claim had been processed that a beneficiary was unlawfully present, CMS’s policies and procedures were not adequate to detect and recoup the improper payment. In response to that previous report’s recommendations, CMS stated that it would attempt to recoup $91,620,548 in improper payments for services provided during CYs 2009 through 2011.”

“In September 2014, CMS again updated its policies and procedures based on appeals that providers had filed in response to the post payment claims edit. Specifically, providers disagreed with the recoupment of Medicare payments and asserted that the information available to them at the times of service indicated that the beneficiaries were lawfully present. CMS officials explained to us that after studying the recoupments in light of these appeals, CMS determined that providers in such cases were without fault,” the report concludes.

Currently, CMS is considering the best approach and feasibility of recouping the payments made to these beneficiaries. The Office of the Inspector General found that a total of $9,267,392 was spent in improper payments for Medicare services among 481 individuals illegally present in the US during the years 2013 and 2014.

The next steps that CMS should consider completing, according to the HHS Office of the Inspector General, is to begin recoupment activities among its Medicare contractors regarding the more than $9 million spent on 481 individuals illegally present in the United States. Additionally, it would be beneficially for CMS to begin recoupment processes for any improper payments that may have been made to illegal immigrants after the audit period of 2013 to 2014.

After receiving the audit from the Office of the Inspector General, CMS has committed to taking steps to address the improper payments made. In particular, CMS will be looking at cumulative overpayments of $1,000 or more and work to recoup these costs. In a statement, the federal agency has said that it would “perform a cost-benefit analysis to determine if CMS should pursue similarly situated overpayments in the future.”

While more than $9 million spent on improper payments may seem like a significant amount, this past May, the Government Accountability Office (GAO) released a report showing that CMS has paid a total of $14.1 billion in improper payments among Medicare Advantage organizations in 2013.

The results showed that CMS did not use “unsupported diagnoses” when assessing inadequate payment risk among contracts with Medicare Advantage organizations. Additionally, the federal agency did not expand its recovery audit program for Medicare Advantage organizations since 2010 even though the Patient Protection and Affordable Care act has required CMS to do so.

When it comes to improper payments for Medicare services among unlawful residents, CMS will work with contractors to pursue recoupment of these costs.

 

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